Talks to Begin on Creating a Bipartisan Budget Panel

WASHINGTON — Vice President Joseph R. Biden Jr. will begin talks this week with leading lawmakers about creating a bipartisan budget commission, an idea that has long languished in Congress but could become central to the Obama administration’s promise to reduce annual deficits.

The aim is to reach an agreement that could be a fallback if, as many expect, the Senate next Wednesday rejects a commission proposal from Senators Kent Conrad of North Dakota and Judd Gregg of New Hampshire, the Democratic chairman and the senior Republican, respectively, on the Budget Committee. They want a panel to recommend budget cuts in time for Congress to vote after the November elections.

Yet the same partisan divisions that keep elected officials from cutting spending and raising taxes enough to rein in deficits are also at play in the debate over a panel to make those decisions and force action.

The Senate Republican leader, Mitch McConnell of Kentucky, has said tax increases should not be an option, while some Democrats see a budget panel as a threat to Medicare, Medicaid and Social Security.

“A claim that any of those items should be off the table is a claim that you really don’t want to do anything about the problem,” Mr. Gregg said. “You can’t resolve the out-year financial problems of this country, which are massive, unless you have everything on the table.”

Mr. Conrad and Mr. Gregg said in interviews that they did not yet have the 60 votes needed to overcome a filibuster threat. The White House, meanwhile, is considering whether to create a panel by executive order.

The efforts to form a panel are moving ahead even as many liberals warn against too aggressive an effort to rein in deficits while the economy struggles to recover from the worst recession in generations. While large deficits and a mounting national debt could imperil the economy in the long run, raising taxes and cutting spending while the economy is operating at far below its capacity could further reduce demand for goods and services and dampen or endanger the recovery.

Mr. Biden is taking the lead in trying to broker a compromise because of his relationships in the Senate, where he served for 36 years. The Treasury secretary, Timothy F. Geithner, and Peter R. Orszag, the budget director, also are participating in the talks with Mr. Conrad and with Representative Steny H. Hoyer of Maryland, the House Democratic leader.

The administration, once cool to a commission, has been forced to become more supportive because the Senate must vote next week on raising the nation’s debt limit so the government can keep borrowing to pay for its operations, and the White House lacks the 60 votes needed. Mr. Conrad and others have indicated they will not endorse an increase without action on an amendment to create a deficit-reduction panel.

Mr. Orszag has emerged behind the scenes as a proponent of a panel, Democrats say, because of his sense that substantial steps to cut budget deficits will not occur otherwise given the polarization between the parties.

But others, including Rahm Emanuel, the White House chief of staff and a former Democratic House leader, have warned that Republican Congressional leaders would choose for a commission’s Republican members only opponents of all tax increases, effectively sabotaging its work.

The makeup of a commission is a major issue, along with whether Congress would have to vote quickly and without amendments on its report.

Mr. Conrad and Mr. Gregg oppose an executive order, saying it would not force Congress to vote as a law could. They call for a law establishing a commission with members of Congress from each party and two administration officials. If 14 of the 18 members agree to a package of proposals, Congress would have to vote on it after the midterm elections.

Administration officials generally favor a panel made up of former lawmakers and budget experts, given the partisanship in Congress.

Leading House Democrats formerly opposed a commission altogether. They recently agreed to go along, if all sides can reach a package deal that also writes into law a “pay as you go” requirement that any new spending or tax cuts must be offset by spending cuts or tax increases.